Some variables have fixed levels. For example, gender and ethnicity are always nominal level data because they cannot be ranked.
However, for other variables, you can choose the level of measurement. For example, income is a variable that can be recorded on an ordinal or a ratio scale:
- At an ordinal level, you could create 5 income groupings and code the incomes that fall within them from \(1-5\).
- At a ratio level, you would record exact numbers for income.
If you have a choice, the ratio level is always preferable because you can analyze data in more ways. The higher the level of measurement, the more precise your data is.